StockCall Review on Regions Financial and First Horizon National: Regional Banks Continue to Post Strong Earnings
LONDON, January 24, 2013 /PRNewswire/ --
Despite the challenging macro-environment, regional banks have reported solid results during the latest earnings seasons. Last Friday, First Horizon National Corporation (NYSE: FHN) reported a 16% jump in its quarterly profit. On Tuesday, Regions Financial Corp. (NYSE: RF) became the latest regional bank to report strong earnings report. StockCall analysts have issued technical research report on Regions Financial and First Horizon National, and these free reports can be downloaded at http://www.stockcall.com/analysis
Demand for Business Loans Helping Regional Banks
With interest rates continuing to remain low and U.S. consumers still de-leveraging, the operating environment for regional banks remains challenging. However, increasing demand for loans from businesses, especially middle market companies, has helped regional banks offset some of the impact from the macro environment.
Regional banks have been making more loans to businesses. This trend continued in the fourth quarter of 2012 as well and has helped regional banks post solid results.
First Horizon's Profit Jumps 16%
Last Friday, Memphis, Tennessee-based regional bank, First Horizon National Corp. reported a 16% increase in its fourth quarter profit, driven by lower costs, which offset the decline in revenue. First Horizon reported a profit of $40.7 million, or $0.17 per share for the quarter, up from $34.9 million, or $0.13 per share reported for the same period in the previous year. Sign up for the complete free analyst report on First Horizon at http://www.StockCall.com/FHN012413.pdf
While net interest income fell 5%, non-interest income dropped 16% during the quarter. However, this was offset by a 13% drop in non-interest expense.
During 2012, First Horizon continued to see an improvement in its asset quality, with its non-performing assets falling 20% and net-charge offs falling 43% from 2011. The bank's capital ratios were also strong during the year.
Bryan Jordan, Chairman and CEO of First Horizon, noted that the bank executed on some tough actions in 2012 to position itself for long-term success.
Regions Swings to a Profit on Q4
Regions Financial Corp. [Free Report on RF] , the holding company for Regions Bank, on Tuesday, announced that it swung to a profit in its fourth quarter, driven by continued growth in middle market commercial and industrial and indirect auto lending.
During the fourth quarter, Regions Financial saw continued growth in commercial and industrial loans, particularly in loans to middle market companies. Average loans in the category rose 8.7% on a year-over-year basis. Robust growth in the indirect auto loan production also helped Regions Financial fourth quarter results. The strong performance in the two categories helped in partially offsetting expected declines in real estate and ongoing de-leveraging from commercial and individual clients.
For the fourth quarter, Regions Financial reported net income of $261 million, or $0.18 per share, compared to a loss of $602 million, or $0.48 per share reported for the same period in the previous year. Excluding one-time items, earnings for the fourth quarter were $0.22 per share.
Commercial and Industrial Loans Growth Expected to Continue in 2013
The growth in commercial and industrial loans, which helped regional banks in 2012, is expected to continue in 2013. However, the first half of 2013 is likely to be challenging for regional banks as businesses are expected to remain cautious due to the ongoing concerns over the debt ceiling issue.
- Regions Financial Corp. Technical Analysis [ http://www.StockCall.com/RegionsFinancialCorp012413.pdf ]
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